The BPO arms of the SWITCH firms as well as pure BPO firms like Genpact, WNS or EXL on the other hand, have gained process expertise to some extent. However, in most cases, these players are still handling parts of the processes (that too the non-core areas) and unless they expand their portfolio, it is very difficult to see them moving up the value chain.

Among the SWITCH firms, Infosys was the first to show it meant business (consulting) when it launched Infosys Consulting as a separate subsidiary, way back in 2004. Ex-Deloitte consultant Stephen Pratt was selected to head the subsidiary.

TCS has been doing consulting work for a long time, but moved into full gear in business consulting only after forming TCS Global Consulting in 2004.

Wipro, on the other hand, gained consulting expertise following the acquisition of NerveWire and the utility practice of American Management Systems. However, the Wipro Consulting team, led by Tim Matlack and Sanjay Joshi, still remains within the ambits of Wipro Tech. Same is the case with Satyam, which too has kept the consulting function within its overall business structure despite acquiring a high-end investment management-consulting firm, Citisoft. Cognizant has a Business Technology Consulting setup that has a long way to mature.

Assessing the Challenges
The competitive comparisons in business consulting capabilities between Indian IT services firms and global services majors present an interesting picture. Obviously, there is a wide gulf and it looks unlikely to be bridged in the near future. The Indian players today face a myriad of challenges that they need to overcome before they can match the likes of IBM and Accenture in becoming consulting champions.

The obvious difficulty first is in building the capability itself; as demonstrated, the company needs to gain both vertical and horizontal expertise (domain and process knowledge) before it can make an entry into the consulting echelon. This, though, is only the first step as next the company has to build a brand. True, the likes of Infosys, TCS or Wipro are fairly strong global brands today; however, most of that brand equity is due to their IT capabilities. How much of this equity can be transferred to their consulting business would determine their success in future.

Manpower is another strong reason that could play a spoilsport for the Indian consulting party. The requirements for IT services and consultants are quite different; with India starting to face a shortfall of IT manpower itself, the future does not bode well here. Not only will Indian companies need people with domain expertise, but also armed with complete process capabilities.

Another big challenge is that even the likes of IBM and Accenture are under pressure on cost and margins, and are increasingly looking at offshoring to stabilize. This means that their blended rates would drop over time, and for Indian firmsright now engaged more in developing their consulting capabilitiesit might not be easy to sustain against such dropping rates.

Another factor that influences competitive comparisons on business consulting is the dual nature of strategic business consulting. One facet of that works on the revenue side, while the other works on the cost side. Indian IT consulting has, till date, been primarily confined to cost reduction. Whether they are up to the games played by consulting majors, like offering advice on revenue maximization, growing business prospects or venturing into new lines of business, is the moot question here. A consulting assignment from the cost side is limited by scope; unless they do not mature to have a grasp of the full industry to offer full spectrum consulting, Indian IT players will never take off.

The Indian software majors, especially the SWITCH club, have built their businesses on the cost proposition, on how a client must spend in order to remain in business. But now the subtle difference is that in a pure business-consulting framework they have to advise their clients on the discretionary spending for revenue enhancement. Once a strategic direction is understood, an IBM or Accenture can advise on how to get there, architect or even execute the solution.

Even in commoditized areas, using domain expertise to suggest productivity improvements is critical. Customers are consistently looking for new value-adds and raising the bar. Will the Indian IT services players prove to be equal to this challenge? In the answer would lie the future direction of the Indian IT story.

Rajneesh De
rajneeshd@cybermedia.co.in

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